Staying Competitive Whilst Maxim is Ing Income by Johnny Webb

8/3/2019 Staying Competitive Whilst Maxim is Ing Income by Johnny Webb

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STAYING COMPETITIVE WHILST MAXIMISING INCOMEJohnny Webb & James Woods

November 2009

Copyright © May 12 BDO. All rights reserved.



Page 2

KEY OBJECTIVE TODAY –

STAYING COMPETITIVE (IN A DIFFICULT ENVIRONMENT)

1. Operations and Finances (Internal Focus)

2. Client Care (External Focus)



Page 3

MY BACKGROUND

• University of Manchester Institute of Science of Technology – BSc Management Sciences 1988 -1991

• Goldblatt McGuigan 1991 – 1996

• BDO 1996 – to date

• Current Role (External)

- Head of Forensic Accounting, Transactional Support and Corporate Finance in BDO Belfast

- Honorary Treasurer and Main Committee Member – Chartered Accountants Ulster Society

• Internal

- Member of BDO Finance Committee

- Member of BDO HR Committee

- Member of BDO Risk Committee

- Past Member of BDO Marketing Committee





Page 5

TEAM OF c.135

Partners 12

Directors 12

Managers 39

Seniors 14

Trainees 42

Support Staff 16

Total 135



Page 6

INTERNAL STRUCTURE OVERVIEW

Partners (12)

MarketingCommittee

RiskCommittee

FinanceCommittee

TeamSub-Group

TeamSub-Group

TeamSub-Group

Internal ResourceGroup

FinanceDirector

RiskManager

HR Committee

HR Manager


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OPERATIONS AND FINANCES

• Key Objective

- “Fees and Cash”



IMPORTANCE OF TERMS OF ENGAGEMENT

• Scope of Engagement – more importantly, highlight what is not included

• Duty of Care – who is placing reliance

• Liability Cap – now more focus

• Fees and Disbursements – clarity is important

• Abort scenarios

• “Your Continuing Instructions”



NOW THAT THE WORK IS FINISHED: -

PRACTICAL IDEAS ON CASH FLOW MANAGEMENT

1. Tight Terms of Engagements

2. Consider Monthly Billings/Intra Month Billings

3. Frequent Communication

4. Professional Fees Finance Schemes (eg BoI)

5. Settlement Discounts

6. Formal Routes …



WORKING CAPITAL AND LIQUIDITY

Working Capital is the amount of money a practice has tied up in funding its day to dayoperations – directly impacting its banking position.

• Working Capital – WIP + debtors – creditors

• Working Capital Ratio - (WIP + debtors - creditors) ÷ fees

• For Practices, as creditors normally relatively small → “Lockup” (WIP & Debtors)

Other ratios -

• Debtors Days - (debtors ÷ fees) x 365

• Creditors Days - (creditors ÷ overheads [exc. wages]) x 365



LIQUIDITY

Liquidity is the ratio of free cash flow in a practice and the level that thisservices interest commitments

• Interest Cover

- Free cash flow/interest

• Free Cash Flow

- EBITDA less working capital, less tax, less capital expenditure





CLIENT CARE IN BDO….

BDO’s Client Care Programme focuses on the following:

• Talking to our clients and developing deeper relationships thus giving us commercialinsight and broadened knowledge of the client.

• Increasing service through client understanding – by pre-empting discussion with

colleagues from other service streams

• Stimulating an innovative culture – bespoke solutions

• Identifying growing clients and aligning resources towards them



CLIENT CARE IN BDO….

What do we do?:

• Key Account Management Programme

• Client Listening Programme

• Regular client meetings and contact

• High Partner to staff ratio with clear lines of communication to Partners

• Regular networking events, tailored to the client

• Regular and targeted Direct Marketing activities eg eNewsletters, flyers

• CPD Courses

• The Database …..

• Network of referrers

• Friday afternoons



BENEFITS TO THE CLIENT

Providing a tailored service - that will pre-empt the issues they are facing

Giving access to an aligned team - one that will have a clear oversight of their business

and the issues it faces

Offering a proactive service offering - solutions will be taken to them rather than them

having to ask for input

Giving more creative solutions - we will deliver creative business solutions bespoke to

them rather than selling a ‘product’

Providing assistance in developing sector knowledge - the delivery of pooled sector

knowledge that will benefit them commercially

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BENEFITS OF A CLIENT CARE PROGRAMME

Feedback we have received from clients on our approach:

“I think from a client relationship point of view, I have experienced better service and quicker responses from BDO, meaning there has been little delay in receiving responseswhen I requested feedback”

“It is their client relationship - the fact that they know our business very well and they have excellent staff continuity”



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BENEFITS INTERNALLY….

• Staff become more involved and engaged in clients’ business

• More interesting work - innovation and creativity

• Increases the chances of identifying business opportunities with clients

• Develops depth of knowledge of the sector – allowing staff to become more involved in

more complex and strategic issues

• Greater chance of winning more profitable work

• Move from being service provider to being trusted business adviser

• Client more likely to recommend you to others

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Staying Competitive Whilst Maxim is Ing Income by Johnny Webb